The average vacancy rate for a U.S. strip mall was unchanged in the third quarter, as the sector still wrestled with the oversupply that closely followed last decade’s housing boom, according to a report real estate research firm Reis Inc released on Wednesday.
While large malls did not have the same problem with oversupply, some are better off than others. Some of the best ones owned by real estate investment trusts such as Simon Property Group Inc enjoy vacancies rates of about 5 percent. Others limp along with 40 percent of the space vacant. Even the stronger ones and their retail tenants are still confronting competition from online shopping and are figuring out ways to co-exist.
“Retail is incredibly sticky,” Reis Chief Economist Victor Calanog said. “I don’t know what you do with these retail centers. As long as your pulling in some money from existing tenants, a lot of them limp along.”